Irish Potatoes Grown in Southeastern States; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 953

[Docket No. FV98-953-1 IFR]

Irish Potatoes Grown in Southeastern States; Increased Assessment

Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule increases the assessment rate established for the

Southeastern Potato Committee (Committee) under Marketing Order No. 953

for the 1998-99 and subsequent fiscal periods from $0.0075 to $0.01 per

hundredweight of potatoes handled. The Committee is responsible for

local administration of the marketing order

[[Page 32967]]

which regulates the handling of Irish potatoes grown in two

southeastern States (Virginia and North Carolina). Authorization to

assess potato handlers enables the Committee to incur expenses that are

reasonable and necessary to administer the program. The fiscal period

begins June 1 and ends May 31. The assessment rate will remain in

effect indefinitely unless modified, suspended, or terminated.

DATES: Effective June 18, 1998. Comments received by July 17, 1998 will

be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

concerning this rule. Comments must be sent to the Docket Clerk,

Marketing Order Administration Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; Fax

202-205-6632. Comments should reference the docket number and the date

and page number of this issue of the Federal Register and will be

available for public inspection in the Office of the Docket Clerk

during regular business hours.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, DC Marketing Field

Office, Marketing Order Administration Branch, Fruit and Vegetable

Programs, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone: 202-720-2491, Fax: 202-205-6632. Small businesses may

request information on compliance with this regulation by contacting

Jay Guerber, also at the above address, telephone, and Fax.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 104 and Order No. 953, both as amended (7 CFR part 953),

regulating the handling of Irish potatoes grown in two southeastern

States (Virginia and North Carolina), hereinafter referred to as the

``order.'' The order is effective under the Agricultural Marketing

Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter

referred to as the ``Act.''

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the marketing order now in effect, Virginia-North

Carolina potato handlers are subject to assessments. Funds to

administer the order are derived from such assessments. It is intended

that the assessment rate as issued herein will be applicable to all

assessable potatoes beginning June 1, 1998, and continuing until

amended, suspended, or terminated. This rule will not preempt any State

or local laws, regulations, or policies, unless they present an

irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(A) of the

Act, any handler subject to an order may file with the Secretary a

petition stating that the order, any provision of the order, or any

obligation imposed in connection with the order is not in accordance

with law and request a modification of the order or to be exempted

therefrom. Such handler is afforded the opportunity for a hearing on

the petition. After the hearing the Secretary would rule on the

petition. The Act provides that the district court of the United States

in any district in which the handler is an inhabitant, or has his or

her principal place of business, has jurisdiction to review the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after the date of the entry of the ruling.

This rule increases the assessment rate established for the

Committee for the 1998-99 and subsequent fiscal periods from $0.0075 to

$0.01 per hundredweight of potatoes handled.

The order provides authority for the Committee, with the approval

of the Department, to formulate an annual budget of expenses and

collect assessments from handlers to administer the program. The

Committee consists of seven producer members and five handler members,

each of whom is familiar with the Committee's needs and with the costs

for goods and services in their local area and are thus in a position

to formulate an appropriate budget and assessment rate. The budget and

assessment rate were formulated and discussed in a public meeting.

Thus, all directly affected persons had an opportunity to participate

and provide input.

For the 1996-97 and subsequent fiscal periods the Committee

recommended, and the Department approved, an assessment rate of $0.0075

per hundredweight of potatoes handled that would continue in effect

from fiscal period to fiscal period unless modified, suspended, or

terminated by the Secretary upon recommendation and information

submitted by the Committee or other information available to the

Secretary.

The Committee met on April 16, 1998, and unanimously recommended

1998-99 expenditures of $12,000, the same as last year. The major

expenditures include $7,700 for the manager's and secretarial salaries

and $1,000 for travel expenses. These and all other expense items are

budgeted at last year's amounts.

Regarding the assessment rate, after considering several options,

the Committee concluded that the current $0.0075 per hundredweight

would not be adequate for the 1998-99 fiscal period for the following

reasons. The Committee's operating reserve is only $5,000 and is

expected to be quickly exhausted. This reserve is the lowest ever for

any of the Committee's fiscal periods except one. Also, wet fields

caused delayed plantings and unfavorable growing conditions, resulting

in potato plant stands estimated to be 20 percent below normal. As a

result of this and other factors, the Committee projects that during

the industry's brief, predominately June and July, shipping and

assessing period, its total potato volume to be handled will be down at

least 100,000 hundredweight. Therefore, the Committee unanimously

recommended an assessment rate of $0.01 per hundredweight, $0.0025

higher than the rate currently in effect.

The assessment rate recommended by the Committee was based on

projected shipments of 1,200,000 hundredweight of Southeastern

potatoes, which should provide $12,000 in assessment income. Income

derived from handler assessments, along with funds from the Committee's

authorized operating reserve, will be adequate to cover budgeted

expenses. Funds in the reserve at the beginning of the 1997-98 fiscal

period are estimated at only $5,000. Funds in the reserve will be kept

within the maximum permitted by the order of approximately one fiscal

period's expenses of $12,000 (Sec. 953.35).

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary upon recommendation and information submitted by the

Committee or other available information.

Although this assessment rate is effective for an indefinite

period, the Committee will continue to meet prior to or during each

fiscal period to recommend a budget of expenses and consider

recommendations for modification of the assessment rate. The dates and

times of Committee meetings are available from the Committee or the

Department. Committee meetings are open to the public and interested

persons may express their views at these meetings. The Department will

evaluate Committee recommendations and other available information to

determine whether modification of the assessment

[[Page 32968]]

rate is needed. Further rulemaking will be undertaken as necessary. The

Committee's 1998-99 budget and those for subsequent fiscal periods will

be reviewed and, as appropriate, approved by the Department.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities. Accordingly, AMS has

prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

pursuant to the Act, and the rules issued thereunder, are unique in

that they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility.

There are approximately 85 producers of Southeastern potatoes in

the production area and approximately 40 handlers subject to regulation

under the marketing order. Small agricultural producers have been

defined by the Small Business Administration (13 CFR 121.601) as those

having annual receipts of less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000. The majority of Southeastern potato producers and handlers

may be classified as small entities.

This rule increases the assessment rate established for the

Southeastern Potato Committee and collected from handlers for the 1998-

99 and subsequent fiscal periods from $0.0075 per hundredweight to

$0.01 per hundredweight of potatoes handled. Both the $0.01 assessment

rate and the 1998-99 budget of $12,000 were unanimously recommended by

the Committee at its April 16, 1998, meeting. The assessment rate

established by this action is $0.0025 higher than the 1997-98 rate. The

Committee recommended an increased assessment rate to help offset the

smaller projected crop of assessable Southeastern potatoes in 1998. The

anticipated crop of 1,200,000 hundredweight is approximately 100,000

hundredweight less than the 1997 crop. The $0.01 rate should provide

$12,000 in assessment income which will be adequate to meet the 1998-99

fiscal period's budgeted expenses.

The Committee discussed leaving the assessment at the current

$0.0075 rate but determined that since the crop is estimated to be only

1,200,000 hundredweight, which is 20 percent below normal, that this

would not generate enough income to meet budgeted expenses without

exhausting the $5,000 operating reserve.

The major expenditures recommended by the Committee for the 1998-99

fiscal period include $7,700 for the manager's and secretarial salaries

and $1,000 for travel expenses. These and all other expense items are

budgeted at last year's amounts.

A review of historical information and preliminary information

pertaining to the upcoming season indicates that the grower price for

the 1998-99 potato season could average $8.60 per hundredweight of

potatoes. Shipments for 1998 are expected to be 1,200,000

hundredweight. Therefore, the estimated assessment revenue for the

1998-99 fiscal period ($12,000) as a percentage of the projected total

crop value ($10,320,000) could be .1163 percent.

While assessments impose some additional costs on handlers, the

assessment is minimal and uniform on all handlers. Some of the

additional costs may be passed on to producers. However, these costs

will be offset by the benefits derived by the operation of the order.

In addition, the Committee's meeting was widely publicized throughout

the Southeastern potato industry and all interested persons were

invited to attend the meeting and participate in Committee

deliberations on all issues. Like all Committee meetings, the April 16,

1998, meeting was a public meeting and all entities, both large and

small, were able to express views on this issue. Finally, interested

persons are invited to submit information on the regulatory and

informational impacts of this action on small businesses.

This action imposes no additional reporting or recordkeeping

requirements on either small or large Southeastern potato handlers. As

with all Federal marketing order programs, reports and forms are

periodically reviewed to reduce information requirements and

duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this rule.

A 30-day comment period is provided to allow interested persons to

submit written comments. Thirty days is deemed appropriate because a

final decision on the assessment rate increase needs to be made as

close as possible to the end of the 1998 shipping season.

After consideration of all relevant material presented, including

the information and recommendation submitted by the Committee and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect, and that good cause exists for not postponing the effective

date of this rule until 30 days after publication in the Federal

Register because: (1) The Committee needs to have sufficient funds to

pay its expenses which are incurred on a continuous basis. Its

operating reserve funds are very low and are expected to be exhausted

before sufficient assessments can be collected during the very brief,

predominately June and July, shipping and assessing period to pay

critical expenses; (2) the 1998-99 fiscal period began on June 1, 1998,

and the order requires that the rate of assessment for each fiscal

period apply to all assessable Irish potatoes handled during such

fiscal period; (3) handlers are aware of this action which was

unanimously recommended by the Committee at a public meeting and is

similar to other assessment rate actions issued in past years; and (4)

this interim final rule provides a 30-day comment period, and all

comments timely received will be considered prior to finalization of

this rule.

List of Subjects in 7 CFR Part 953

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 953 is

amended as follows:

PART 953--IRISH POTATOES GROWN IN SOUTHEASTERN STATES

1. The authority citation for 7 CFR part 953 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

2. Section 953.253 is revised to read as follows:

Sec. 953.253 Assessment rate.

On and after June 1, 1998, an assessment rate of $0.01 per

hundredweight is established for Southeastern States potatoes.

[[Page 32969]]

Dated: June 12, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-16091 Filed 6-16-98; 8:45 am]

BILLING CODE 3410-02-P